ASSESEMENT OF EXTRINSIC REWARD PRACTICES: THE CASE OF COMMERCIAL BANK OF ETHIOPIA

Abstract

Organizations are seeking to develop, motivate and increase the performance of their employees in a variety of human resources applications. Therefore, the extrinsic reward practices have been considered to be the most considerable practices of the human resource management system. As reward is a steering instrument in maintaining the organizational efficiency and productivity as well as takes the lion’s share in motivating the employees to act in the best interest of the organization, the main objective of conducting this research study is to assess the current extrinsic reward practices at Commercial Bank of Ethiopia. The result of the study may significantly contribute to a better understanding with regard to extrinsic reward practices. This study employed descriptive research design and used questionnaire to gather data. The target population of the study comprised of 1408 employees of CBE under Kirkos district branches. A sample of 200 employees was selected from the 14 branches using probabilistic sampling technique. The reliability of the instrument was measured using Cronbach Alpha and the result was 0.787, which refers there is high consistency on the measuring instruments. Quantitative data analyzed by aid of SPSS stastical software version 20 and presented by tables using percentages, mean and standard deviation. The result of this study shows that extrinsic reward practices such as organizational policy, salary, working condition and promotion are weak not being fair/equitable and not effectively practiced. The study also finds out that promotion and job security reward polices are not clearly communicated (lack of transparency) to employees. The researcher based on the research findings concludes that extrinsic reward components showed a low result with the average mean value 2.88 that the employees are not satisfied and happy with the extrinsic reward practices of the company. Extrinsic reward practices are not competitive and not capable to retain and attract its employees. Employees of the bank are not fully satisfied by the existing extrinsic reward practices of the organization. Finally the researcher suggests to amend extrinsic reward polices which ensures that employees are well and effectively rewarded favouring all employees to retain and attract suitable employees with the aim of achieving sustainable competitive advantage.